Rachel Stolrow: A quick disclaimer before we get started. The Intrust Group, or Intrust, does not provide any investment advice. We don't endorse any products. All information and materials are always for educational purposes only.
Rachel Stolrow: Every party, is always encouraged to consult with an attorney, accountant, financial advisor before entering into an investment decision.
Rachel Stolrow: On today's agenda, we will be introducing land fund partners, thank you for coming today. Farmland 101, Analyzing Historical Performance of Farmland.
Rachel Stolrow: Learning from Land Funds Strategy.
Rachel Stolrow: reviewing energy and water rights, and then always, as always at the end, we will have a Q&A to answer any questions that have come up.
Rachel Stolrow: A little bit about me. So, my name's Rachel Stolrow. I have been with the Entrust Group for almost 10 years now, so quite some time. I love to educate investors and professionals on tax-preferred retirement accounts, so very much like this.
Rachel Stolrow: We here at the Entrust Group, we are self-directed retirement administrators, or IRA administrators. We have very knowledgeable staff that is
Rachel Stolrow: you… most of us have been doing this for quite some time now. Many hold a CISP certification, and very much like this one, we host monthly educational webinars. We are very big on education, so whether you're calling
Rachel Stolrow: Into us, speaking with us directly, or whether we're hosting a webinar, we love to provide educational content.
Rachel Stolrow: We have over $5 billion in assets under administration.
Rachel Stolrow: Over 40 years of service, so we have been doing this for quite some time, in totaling over 24,000 active investors, and we always provide every company and client with a single point of contact. We say single, but it's really a team of two to make sure that everyone is taken care of through their self-directed retirement journey.
Rachel Stolrow: Alright, so without further ado, I'd like to introduce Chris Morris at Land Fund Partners.
Chris Morris: Great, thanks, Rachel, and thank you, Entrust Group, for the opportunity to share a little bit with the audience today about farmland and how it can help protect your retirement capital. My name is Chris Morris, and I'm with Land Fund Partners.
Chris Morris: Before we get started, a little bit of a disclaimer from our side. This presentation does not constitute an offer to purchase securities. Every investor needs to consult with their advisors, read the prospectus.
Chris Morris: And we will have an opportunity later if you'd like to express interest in learning more about Land Fund Partners.
Chris Morris: So, quick background. I am Chris Morris, president of Land Fund Partners. I helped start the firm back in 2013.
Chris Morris: I'm from a small town in Kentucky, grew up around farming.
Chris Morris: And really, with my business partner, John Ferris, through the Great Financial Crisis, we were studying ways that we could help high net worth investors and retirees diversify their portfolio to own U.S. row crop farmland, which can be a tremendous tool to help reduce drawdown risk and protect your purchasing power.
Chris Morris: So, if you're a farmland investor, you're in good company. I'd like to start with this story about Warren Buffett. So, 15-year-old Warren Buffett did not start out by picking stocks, obviously one of the greatest equity investors of all time.
Chris Morris: But one of the first things that he invested in was farmland. So, 15-year-old Warren Buffett had saved enough money from his newspaper route and other jobs to actually acquire 40 acres of farmland in Nebraska, where he is from.
Chris Morris: So, it didn't take a super experienced investor to understand that it has strong fundamentals. The fundamental value of farmland is that it is a finite asset, it… you can touch it, see it, it's tangible, and it grows something of value, food, fuel, and fiber.
Chris Morris: For the real economy.
Chris Morris: So, we think there are 3 primary benefits. There's certainly more, but these are the 3 primary benefits of farmland ownership.
Chris Morris: So, the first is income.
Chris Morris: So, one of the ways that you can generate income from farmland is by leasing it out to farmers. And then, in return for leasing the land, you receive a rent. That can either be a crop rent, a cash rent, they're actually blended rent arrangements, but those… that income that you receive from farmland, those payments are extremely stable.
Chris Morris: Even in difficult economic environments, people have to eat. Our world needs the food that is coming off of
Chris Morris: A finite amount of farmland. And those, those, the yield, the income from farmland is very reliable.
Chris Morris: The second way that it can benefit investors is through appreciation of your principle of your investment. Farmland is finite, and demand is increasing.
Chris Morris: There is just no way to create more farmland, and we've actually started losing farmland in the United States
Chris Morris: Due to path of development and solar farms. And then if you overlay on top of that farmland that actually has access to abundant fresh water supplies.
Chris Morris: It is decreasing. So, when you look at the data of farmland real estate, the USDA actually tracks this, and has been tracking it since the year 1850.
Chris Morris: But if you just look over the last 100 years, since 1926, U.S. row crop farmland real estate has appreciated at 4.3% annualized growth rate. So that's been very consistent over time, and there's a limited amount of farmland with increasing supply.
Chris Morris: And then the third thing, and part of the reason we want to talk to you, especially in today's environment, is true diversification. So, farmland returns are non-correlated to nearly every other asset class. So, what does non-correlated mean? It means that what farmland does on a return… the returns of farmland on an annual basis
Chris Morris: don't necessarily move in lockstep with other assets. Why is that important? Because you can still generate strong returns while having a different risk profile and respond to different risks in the investment world.
Chris Morris: You don't want all of your investments to move in the same direction at once, because that can lead to significant drawdowns and hurt your ability to achieve your financial goals. So you want to be truly diversified across a number of different asset classes.
Chris Morris: So, given some of those factors, many of you are familiar with what's been happening with gold and silver. Farmland is often referred to as gold with a coupon. It is a real asset, it's tangible, shares a lot of those same characteristics that gold has.
Chris Morris: But it also produces annual yield. Through that farmland rent, you actually receive annual income, and that's why farmland is often referred to as gold with a coupon.
Chris Morris: It is actually also a great inflation hedge, so farmland has actually tracked inflation even more closely than gold over the last 50 years, because food is actually part of CPI. Food represents 14-15% of the CPI calculation. So there's an inherent linkage with preserving your purchasing power and hedging against inflation, much like gold.
Chris Morris: If you look at how… dig in a little more on how farmland's historical performance has done, we want to zoom in on two specific periods of time. So, most of you on this webinar were investing through both of these time periods.
Chris Morris: the dot-com bust of 2000 and 2002, and also the great financial crisis of 07, 08, 09. So, we really got into farmland. Again, we've been doing this since 2013, but we studied it through the Great Financial Crisis, and we're just…
Chris Morris: Really impressed with how farmland was a reliable source of return, even when equities pulled back.
Chris Morris: We're not saying that we think an equity drawdown is imminent, but there's certainly a lot of,
Chris Morris: Similarities with the dot-com era, with what we're seeing right now, as it relates to artificial intelligence build-out.
Chris Morris: valuations of stocks, valuations of private businesses, and we think that the next time there is an equity drawdown, our view is that we feel confident that U.S. row crop will continue to perform as a steady store of value.
Chris Morris: And that's because the demand for farmland, again, is inelastic in economic terms. The demand for food on a global basis, food, fuel, and fiber, is very stable, and people have to eat regardless of whether equities are high or low. There's still heavy demand for farmland.
Chris Morris: digging in a little bit more on historical correlations, and can certainly answer individual questions about this later or after the presentation, but you can see here, U.S. row crop farmland, it's a little small, but has generated about a 10% annual return
Chris Morris: Over the last 30 years. So that's the average annual return. That includes both appreciation of the farmland and the rental cash flows that come off the farm.
Chris Morris: And it's done so with much lower volatility. Volatility's on the x-axis.
Chris Morris: You compare that to the S&P 500, which has had higher annual returns over the last 30 years, but has done so with much more volatility. So, when you think about having a more stable asset in your portfolio, not watching a ticker go up and down all day long.
Chris Morris: And knowing that you have a real tangible asset, farmland has been reliable over the last 30 years.
Chris Morris: Further to, sort of, AI-proofing your portfolio, farmland has a negative correlation with both the S&P 500 and the NASDAQ, which is particularly tech-heavy. So, in the
Chris Morris: Common, you know, lay terms, having a negative correlation to the NASDAQ means if the NASDAQ goes down, then more than likely you would expect for farmland to be going up, which is a positive way to hedge some of your exposure to equities in this current investment environment.
Chris Morris: So, moving on, there are different kinds of farmland. At Landfund Partners, we focus on row crop farmland. So, row crop farmland is defined as land where you can plant crops and switch them annually. So, whether it is corn or soybeans, cotton, peanuts.
Chris Morris: If you plant a crop in 2026, then you can go in 2027 and actually plant a different commodity and switch
Chris Morris: So those are called annual row crops. Those are different than permanent crops. Permanent crops are primarily on the west coast. These would be establishments like vineyards, almond farms, pistachios.
Chris Morris: orchards, and these require a longer capital outlay period. As the name suggests, permanent crop.
Chris Morris: Maybe not completely permanent, but it's very hard to remove an almond tree, for example, and then switch that into pistachios the next year. Typically, when you plant that tree, it is going to stay with that one commodity. We don't do that. There are certainly experts that do invest in permanent crop farmland.
Chris Morris: It's a little more operational heavy, and we don't, participate in that at Landfund Partners.
Chris Morris: And then finally, there's also pasture land or rangeland, ranches, right? Many of you are familiar with
Chris Morris: Yellowstone, John Dutton, right, those sorts of big farm ranches in Montana with cattle and dairy operations. There are certainly ways to monetize farmland through those endeavors, but not something that we do here at Landfund.
Chris Morris: We focus on one particular area of the country called the Mid-South, so the six-state region that is outlined in green on the screen.
Chris Morris: And we settled on investing in this part of the country, and there are positive attributes to many parts of the country, but we felt really confident investing here, for four main reasons. So, the first is crop diversity. The second is that much of this area has a tremendous amount of groundwater.
Chris Morris: The third is the relative value. We're still able to buy land here at about half the price.
Chris Morris: of Midwest farmland, so you can get to scale faster with fewer dollars. And then also local relationships. As I mentioned, I'm from Kentucky. All of our farmland investment team is from this area of the country, and
Chris Morris: A lot of farmland is local knowledge, and having a good reputation, and being able to find off-market investment opportunities in the area where you focus.
Chris Morris: So, to touch a bit on crop diversity,
Chris Morris: people have asked us, you know, why don't you buy land all across the United States? We actually think that we're even more diversified than simply buying row crop farmland across multiple parts of the country, because you can own land in 10 or 15 different states, but if you have the same soil types, and it is just corn and soybean land.
Chris Morris: Then you really aren't that diversified in terms of the crops that can be grown.
Chris Morris: In the Mid-South, where we focus, we currently own about 50,000 acres of land.
Chris Morris: roughly $400 million of assets in this area of the country. We have rice, soybeans, peanuts.
Chris Morris: Sweet potatoes, cotton, grain sorghum.
Chris Morris: There's peanuts, wheat, there's a wide variety of crops that can be grown in this area of the country. So, that's important because the farmer can switch the crops annually and find the most profitable option to grow on the farmland.
Chris Morris: Water is a big deal. It was a big deal when we started back in 2013, and the water situation in much of the country, and even the world.
Chris Morris: is even worse than it was then. So, California, as an example, has depleted a lot of their irrigation wells. Farm… the farm economy there has had to really expend a lot of money on water rights.
Chris Morris: There are other aquifers in different parts of the country, but the Mid-South, we think, has a big advantage because of the Mississippi alluvial aquifer.
Chris Morris: There are roughly 300 years of groundwater available, and that's based on U.S. Geological Survey well data, and then how deep the aquifer is. And what makes this really unique is that the Mississippi River flows right through the middle of it, so you can think of
Chris Morris: An aquifer, almost like a big underground bathtub.
Chris Morris: And water can be pumped out to irrigate the farms. And then the Mississippi River, annually, with its water levels going up and down, almost refills that underground bathtub. And it's a unique part of the world, and
Chris Morris: A very reliable source of water. 93% of the farmland that we own is irrigated, and we think that that's really important to having a successful farmland investment. So whether it's in this region or other parts of the country, you need to make sure that you have reliable water.
Chris Morris: We have a local team, so the local relationships that we have, our boots-on-the-ground approach. You have to think about how you're gonna manage your farmland investment. We do that internally. We have…
Chris Morris: five members of our farm operations and farm management team who help oversee the farmers that lease the land. We typically lease out for a cash rent.
Chris Morris: We have very large farmers, up-and-coming younger farmers. People ask us a lot, many of you have probably seen a Wall Street Journal article recently that really focused on the succession planning of older farmers. Farmers as a population, I think the average age is now approaching 60 years old.
Chris Morris: There are a lot of farmers that are in their 70s or even 80s, and people wonder, you know, who's gonna handle the farm when I'm gone? And we actually provide a solution to that problem
Chris Morris: We like to work with owner-operators that are retiring, because we can make them a fair offer for their farmland property, and then we lease that out to another local farmer
Chris Morris: Most usually a younger farmer who is up and coming and looking for an opportunity to expand their acres. So, it's a win for the farmer that's selling, it's a win for the younger farmer that needs access to more land.
Chris Morris: That we partner with, and it's also a win for our investors, because we get to own a really high-quality farm with a good operator.
Chris Morris: We source deals from many different places. As I mentioned, farmers, our current tenants will bring us opportunities, local banks who, contact us and know that someone's looking to sell.
Chris Morris: the state attorneys, many of the farms that we buy are from estates that, don't necessarily have professional farm management knowledge. Maybe there's a relative that is leasing the land, but they don't really know if they're getting an appropriate market rent.
Chris Morris: And, not the highest and best use of that farm to necessarily stay with that family. So, we're able to come in, fix the farms up, lease them out professionally, find the right farmer, and, create value for our investors that way.
Chris Morris: We're very selective with what we buy. Typically, we see, in our region of the country, close to a billion dollars of farmland annually.
Chris Morris: We underwrite that, we check for flood history, soil type, crop history, we compare it with regional transaction data. Again, an advantage of
Chris Morris: focusing on one part of the world is that you get very familiar with it, so we can see market comparable transactions and learn a lot about what's happening in the specific market
Chris Morris: Where we… where we invest. So, typically, we're looking to buy 40 to 75 million of farmland a year. That ebbs and flows.
Chris Morris: Based on deal flow, based on the price of land, and the deals that we're able to secure.
Chris Morris: One of the things that we do is buy smaller farms, so we call these bolt-on acquisitions. Again, tying in with that idea of smaller farm operators or families that maybe still own
Chris Morris: 400 or 600 acres as a legacy asset. Maybe their grandfather was a farmer, but they've moved on. We actually focus on buying those smaller farms.
Chris Morris: and then building them together into bigger blocks of land. And that's, really attractive to the local farmer, because we're able to
Chris Morris: lease them more acreage in one spot, which is more efficient for them. They can actually spread their cost across, more acres, and make their operation more profitable.
Chris Morris: So the way that you farm is also important. You can buy the land, but if you don't have a farmer that's going to take care of the soil, and you aren't using the right practices, then you can actually erode the soil over time.
Chris Morris: We take the exact opposite approach here at Landfund. We focus on what's called regenerative agriculture. So, we require, through our lease agreements, at least one regenerative practice to be done on every single farm.
Chris Morris: And why that's important is because we really think what we're doing is buying the soil. You can own the land, but if you don't take care of the earth, take care of the soil, and be a good steward of those resources, you actually have declining value over time.
Chris Morris: So you have to have a good management practice, and regenerative farming is something that we're really keen on. We've seen positive results as we've been doing this for many years now on our farm portfolio, increasing soil organic carbon, reducing water consumption, and fighting erosion.
Chris Morris: So, that's the core of farmland, is owning the soil, leasing it out, and having those assets appreciate over time.
Chris Morris: Now, from an optionality perspective, there's a lot of other ways that you can generate cash flow from farmland.
Chris Morris: So, those would include renewable energy options, such as solar and wind.
Chris Morris: mineral rights, water rights, recreational, so hunting. We have a lot of deer and duck hunting in our part of the country, and also environmental credits are a growing revenue source for owners of farmland.
Chris Morris: Specifically, we think that water rights could be a really important play over the next 5 to 10 years. It already is very important out in the western part of the country. We see that becoming a meaningful, potential source of return over the next decade or so in the Mid-South.
Chris Morris: And then renewable energy is particularly interesting. These would be things like solar farms.
Chris Morris: So, one example of this optionality of farmland, when we have built our investment portfolio of assets, we look to buy really high-quality farms with great soils, great farmers, high crop productivity and diversity.
Chris Morris: We actually thought, when we were buying these farms that the transmission lines, as you can see here, this is actually on the first farm that we ever bought, we thought these transmission lines were a bit of a nuisance. The farmer couldn't drive the tractor in a straight line, you sort of had to drive around it.
Chris Morris: You know, fast forward to today, we're starting to see solar options and solar farms become a significant potential source of return for our investors. We've actually sold one solar farm already for roughly 3 times
Chris Morris: The purchase price of the farm, and with the demand for energy that's happening from data centers, we think that solar, while it competes with farmable land, it can be quite lucrative to farmland investors.
Chris Morris: So, certainly a lot more that we could dig in on, on farmland investing. More than happy to stay in touch with you after this presentation.
Chris Morris: If you would like to respond to the poll and hear more about what we do, then we can follow up with you. We also have an email here listed on the page.
Chris Morris: IR at landfundpartners.com. We have multiple people monitoring that inbox.
Chris Morris: And finally, if you'd like to stay in touch, we do have a newsletter. You can scan this QR code. We don't, send a lot of information out too much. It's not going to be overwhelming, but once a quarter or so, you can hear what's happening in the farmland world. So with that, I will turn it back over to Rachel.
Rachel Stolrow: Thank you very much, Chris. Alrighty, let's wrap up here.
Rachel Stolrow: So, when investing in any investment with a self-directed retirement plan, I always say it's 3 easy steps, and it's probably easy because I help clients do it every single day, and that's kind of the beauty of working with Intrust, but
Rachel Stolrow: Step number one, you would establish an interest retirement plan. Number two, you would fund your account one of three ways.
Rachel Stolrow: Through a transfer, rollover, or a contribution. And number three, you would direct us on where you wanted to purchase, where you wanted to funnel your money to.
Rachel Stolrow: So what's next here at the Entrust Group? We'll be sending you a replay, so if you wanted to go ahead and replay this, you can do that. We also will have a March webinar, and next month we'll be
Rachel Stolrow: Doing hospitality, real estate investments, so using data to make smarter decisions. So, stay tuned for that as well.
Rachel Stolrow: If you want any more information on self-directed retirement plans, you're always welcome to reach out to us. Like I said, we're here to answer any questions that you have. We have very knowledgeable staff, and you can also visit our website.
Rachel Stolrow: And our Learning Center, I would encourage you to do that as well. We have many, many great webinars and blogs that our marketing team has done a wonderful job putting up there to help educate investors.
Rachel Stolrow: Alrighty, and now to the Q&A, so please drop your questions in the chat. We will do our best to answer what we can. I will read out the questions here, and alrighty, here we go. So the first question is.
Rachel Stolrow: How does UBTI work with IRAs? So, some investments may have unrelated business income tax attached to the investment, usually those that are leveraging
Rachel Stolrow: money, or have shorter, short-term rentals. We aren't tax advisors, so please know that. So, number one, I would ask a company that you're investing in, because they would know best if it's attached to the IRA or,
Rachel Stolrow: or to their investment, or ask your tax advisor. I don't know if you wanted to add to that, Chris.
Chris Morris: Yeah, yeah, specifically, you know, Rachel, we're also not tax advisors, certainly want everyone to have their own counsel and advisors, but, we do use a small amount of leverage in our funds at Landfund, so there is a small amount of UBTI that is generated
Chris Morris: I know that there are threshold amounts at which you have to report that on your tax returns, but, that's more of an individual and advisor decision. There's a small amount that's generated.
Chris Morris: it doesn't necessarily disqualify the entire IRA from being tax-advantaged or anything like that, but it is something to walk through with your advisors.
Rachel Stolrow: Absolutely. Alrighty, next question here. Is rent income an interest? A very similar question, so I'll skip that one. What is typically the smallest track acre that could be considered farmland?
Chris Morris: So…
Chris Morris: there are, according to USDA data, if you have 20 acres in your backyard, or 10 acres, and you're growing tomatoes, or, you know, register it and make it an actual farm operation, then that could be considered a farm.
Chris Morris: In terms of maybe what Landfund Partners does specifically, we will buy as small as 100 acres. We're actually looking at a 120-acre farm right now that joins some of our existing properties.
Chris Morris: And then the largest acquisition we've ever done was about 6,200 acres, so there's a very wide range.
Chris Morris: But the, average-sized farm, according to the USDA, is about 400 acres.
Chris Morris: our farmers at Land Fund typically farm around 8,000 acres on average, so much larger than your average, farm operation is what we own, but we do like to buy smaller properties because we think you can create a lot of value there.
Rachel Stolrow: Next question, does your company actually own 46,000 acres? If not, please elaborate a bit more on the scope of management.
Chris Morris: Yes, so we have a number of different investment funds. We own about 46,000 acres, just over 46,000 acres of
Chris Morris: land in this area of the country. And we…
Chris Morris: Actively manage all those, assets.
Rachel Stolrow: Awesome. Alright, looking to the next one…
Rachel Stolrow: I apologize, if we can just ask… there was one about, regional farmland. I'm not sure I'm quite following what the question is. If you don't mind just resubmitting it, I'm happy to, then read that aloud and get that answered for you.
Rachel Stolrow: Alright, another one says, big kudos on promoting regenerative farmland.
Rachel Stolrow: So then, the… the next question after that, so, AG gets a lot of…
Rachel Stolrow: subsidy money. Do you get that, or does the farmer, or is there a split?
Chris Morris: Yeah. Yeah, it's a great question, and you know, certainly something also that's in the headlines a lot. We have done a ton of research on government support payments for farmers. They've been very reliable. Really, since the Dust Bowl, there have been, in the 1920s and 30s.
Chris Morris: In the 30s, I believe, they started to put in place, support mechanisms for farmers.
Chris Morris: That has continued to present day. Bipartisan, administrations have
Chris Morris: Or different administrations, I should say, have all supported.
Chris Morris: farmers, and we, as the landowner, we do not participate in payments from the government. I want to be very clear on that.
Chris Morris: we would actually be disqualified because of income limitations. So, the farmers that we lease the land to, they are recipients of
Chris Morris: Aid, whether it's ad hoc aid.
Chris Morris: There was recently $12 billion of support that was passed
Chris Morris: Through the current administration in December, that should be flowing to farmers soon. There are also a number of long-term support programs, so…
Chris Morris: Last summer, the Big Beautiful Bill Act increased one program in particular called Price Loss Coverage, which is a really important program to understand.
Chris Morris: Essentially it says that if a…
Chris Morris: If the market price for a commodity falls below a set reference price, a floor, almost, for that price, then there's an automatic payment that is sent to farmers, and that's all done through the USDA and the FSA Farm Service Agency. So, very important programs, they're important to understand, when you're thinking about making an investment in farmland.
Chris Morris: But as the landowner, and as an investment company, we do not directly receive any government payments.
Rachel Stolrow: Thank you for that. Next question. How has the climate change affected farmlands in your area?
Rachel Stolrow: How will the building of AI or cloud infrastructure affect farmland, specifically water usage? What is your exit strategy? And some of these, Chris, just a heads up, if it's a deeper conversation where, you know, maybe you should be reached out to, please just shout that out and let them know that as well.
Chris Morris: Yeah, sure. So, 3 great questions, certainly can spend time individually on a call to answer those. I would say, maybe just quickly running over them. So, climate, that is part of the reason
Chris Morris: Long-term changes in climate or weather patterns, that's part of the reason that we invested where we did, because of that groundwater aquifer system.
Chris Morris: As, you know, if the world continues to get hotter, we think it's really important to have water to be able to irrigate the crops. You also have to have great drainage to then get the water off the fields.
Chris Morris: You don't want to have too much water, that can be a bad thing, too.
Chris Morris: But yeah, we see…
Chris Morris: Climate being a longer-term issue for many, many industries, farmland is not any different, but we've tried to mitigate that a bit, specifically through our strategy in this one part of the country.
Chris Morris: Our artificial intelligence data centers, those are, significant, and that's…
Chris Morris: become a real hot-button issue in many parts of the farm community. In our region, XAI has located their two huge supercomputers that train, Grok.
Chris Morris: Meta is building, I think, the largest data center in the world in northern Louisiana.
Chris Morris: And a lot of the reasoning for that is related to being able to utilize the groundwater resources. It's one of the reasons that we think, there could be a water rights conversation coming down the pipe in the future, because as these large companies start to utilize water, we think that the local communities will say.
Chris Morris: you know, hey, why aren't we receiving any compensation for this natural resource that's being utilized? So, AI and data centers are increasing energy demand and certainly an important trend in the industry.
Chris Morris: Regarding exit strategy, happy to talk specifically about that, maybe in a bigger context. But we do sell farms from time to time. As I was mentioning, we've sold some to solar developers. We're in discussions for a potential battery storage facility.
Chris Morris: And there's a number of,
Chris Morris: you know, liquidity options that I'm happy to talk about, maybe on a separate call.
Rachel Stolrow: Thank you for that.
Rachel Stolrow: Okay, so next question is… so with Farmland, how do you take an RMD in the future? So.
Rachel Stolrow: You do not need to take an RMD from your retirement plan here at the Entrust Group. So, for example, if you were investing in farmland, it was time to have an RMD. We do need your proper value to have that number reflected properly, but you can always take that at another retirement, plan that you may have at a different custodian.
Chris Morris: Yeah, maybe if I can just tag along there,
Chris Morris: Rachel, so we also do… in one of our funds, we have, quarterly valuations, so third-party, appraisals and valuations. So, one of the things that we provide our investors is a timely, asset value
Chris Morris: For knowing how much their investment is worth at a given time.
Rachel Stolrow: Perfect, perfect. And one thing I forgot to mention, which a lot of clients don't realize, too, because some clients may not have another retirement plan, is you can always do what's called an in-kind RMD, which is instead of taking cash, you distribute out the asset to yourself, so either all or a portion of that investment.
Rachel Stolrow: will now be… Yours instead of the retirement plans, without, you know, physically liquidating the investment.
Rachel Stolrow: Okay, what is Land Fund Partners' history of returns for investors since 2003? Again, Chris, please, if there are some questions that may need to be handled a little bit more in detail, feel free to have a call outside of this.
Chris Morris: Yeah, sure, I think, you know, don't want to trip any wires for the public presentation. We have a strong track record of
Chris Morris: Generating mid-teen returns. We've only been operating since 2013, not 2003.
Chris Morris: Sorry if that was unclear on one of the pages, but we have a 12-13 year history, and would be happy to share that with potential investors. We pay an annual distribution, so there's a cash component.
Chris Morris: Annually, we have some investors that choose to actually reinvest that distribution, and then the majority of the return is from the increase in farmland values over time.
Rachel Stolrow: Awesome, thank you. And Chris, I'm going to keep going through questions, but what I'm going to ask you to do, if you want to go back a couple of slides and have your contact information up, just because there are so many questions… we have a ton of questions to get through, and there's so many good ones, I just want to make sure, perfect, that anyone that may want to reach out.
Rachel Stolrow: can reach out to you as well.
Rachel Stolrow: Okay, going through some of the ears, so…
Rachel Stolrow: what research is available to take a deeper dive into farmland investing? So whether, I mean, through your company or just generally, where can clients find, maybe, research to take a deeper dive into this subject?
Chris Morris: Yeah, so, I would refer people to our website. We have a lot of information there about, different insights, articles on, different types of farmland. I'll say, too, like everyone else, I've used
Chris Morris: Google and some of the AI tools out there, right, to ask questions and find resources. There is information on the USDA's website that would be
Chris Morris: You know, unbiased and provided by analysts at that government agency. So yeah, there's a lot of resources out there, and our website is certainly a good one.
Chris Morris: I'm also happy to answer questions. If people have specific questions, they can email, this irr at landfundpartners.com. They can also email me directly. My email is cmorris
Chris Morris: at landfundpartners.com.
Chris Morris: And happy to point them to some, some other… Resources.
Rachel Stolrow: Awesome.
Rachel Stolrow: Thank you so much. Oops.
Rachel Stolrow: Sorry, hold on one moment.
Rachel Stolrow: I'm so sorry, my screen got stuck here for a moment. Okay, what are annual distributions to investors? That may be a question.
Rachel Stolrow: Again, kind of a private conversation, please feel free, investor relation, at ir at landfundpartners.com to get those questions answered. What is the investment structure? What is the minimum amount? Chris, if you want to quickly touch on that, but again, we'll kind of…
Chris Morris: Yeah, so our current, open fund has a $100,000 minimum investment, and we are eligible to accredited investors.
Chris Morris: With a quick Google search, you can look at what those requirements are to be defined as an accredited investor, but those are the two minimum requirements that we have.
Chris Morris: a credit investor, and then a $100,000 initial investment. We do have a couple funding opportunities coming up. Our April 1st is actually, almost full, so…
Chris Morris: nearing capacity there, but, if someone's interested, then we could hopefully, be able to help them get invested by, July 1st, but, certainly depending on, on the timing,
Chris Morris: Can't have a conversation around that.
Rachel Stolrow: Thank you. Next one, what is the max contribution… max limit that you can contribute to your self-directed IRA per year? For 2026, it is $7,500 for anyone under 50. Over 50, there's a catch-up of $1,100.
Rachel Stolrow: what is the investment structure and minimum amount? So we have a lot of these investment questions. Again, please do reach out to IR at landfundpartners.com. I'm sure they will be happy to get those questions answered for you.
Chris Morris: Yeah, one other thing there I'll add on the structure, so it's a limited partnership, so investors receive a K1, so that K1 would be… would be sent. We typically get the K1s done
Chris Morris: In April, so we'll not be… if you have multiple private investments, we will probably not be the last one that you're waiting on.
Rachel Stolrow: Yeah. And next question. What are the main risks? What are main risks for investors? Worst case scenario, any hold periods? Can you reinvest, 1031 proceeds?
Chris Morris: 1031, no. So you cannot 1031 into a limited partnership directly.
Chris Morris: you know, certainly something to also consult your advisors on. We can't 1031 directly into our fund. There is something called a 721 exchange, where someone can contribute farmland in a tax-deferred manner, but not a lot of people that are doing that.
Chris Morris: I forget the other part of that question, Rachel.
Rachel Stolrow: Sorry, let me scroll back up there. I'm kind of going through all these questions, worst case, so.
Chris Morris: Oh, yeah, risk.
Rachel Stolrow: risks? What is the.
Chris Morris: dirty.
Rachel Stolrow: case scenario and hold periods.
Chris Morris: Yeah, so our minimum hold period is, 3 years, so most of our investors hold for much longer than that.
Chris Morris: you're in control of your own investment timeline a bit. We can dig into why that is. We're a semi-liquid, evergreen fund. Happy to explain more and, you know, share the prospectus.
Chris Morris: Risk factors, you know, we've talked about climate, which is one of them. I would say with any private investment, you can lose money. I'll just go on the record saying that. We've had a positive track record since we started, but, you know, things happen, and we could be wrong.
Chris Morris: We certainly feel really good about what we're doing. I would say one of the biggest risk factors is…
Chris Morris: some of the global competitiveness, right? So I think, Brazil has become a really strong agricultural, country, but there's a lot of interesting dynamics around that, you know, the geopolitics.
Chris Morris: You know, climate, we've tried to mitigate some. I would say you have to have a diverse tenant base. We have a pretty diverse tenant base.
Chris Morris: So yeah, happy to dig in specifically on
Chris Morris: Specific risks, on a, on a call or via email.
Rachel Stolrow: Thank you. Kind of similar, and you touched on a little bit of this in your last response, does or can land fund partners provide a prospectus on an investment opportunity, perhaps?
Rachel Stolrow: you know, perhaps are located on your website. Again, the contact information down here, really great place to start, but if you want to add anything to that, Chris, you may.
Chris Morris: Yes, we will send our prospectus to you if you reach out to us. We do not have it publicly available, but happy to do that for qualified investors.
Rachel Stolrow: Awesome, thank you.
Rachel Stolrow: Do you invest in individual farms, or only farmland funds, such as…
Rachel Stolrow: land fund. Not sure if you…
Chris Morris: So, we… so, this gives a little bit to structure, too. So, we own farmland. It's all owned by a limited partnership, so investors can invest in that limited partnership, which directly owns
Chris Morris: multiple different farms. Almost 50 different farms are held under one limited partnership, and then we're always looking for and adding new farmland into that same portfolio of properties. So as an investor in the fund, you own your pro-rata share
Chris Morris: Of all those different, properties.
Rachel Stolrow: Thank you.
Rachel Stolrow: Do you provide a chain of custody? There's a couple on these structuring of the investments, such as deed information for specific farmland investing in, and does the investor take title of the fund? I think that would go to the partnership, but please do elaborate.
Chris Morris: Yeah.
Chris Morris: Yeah, so, before we close on any, property, there's an extensive title, title search.
Chris Morris: Diligence process, survey, clean chain of title, we get title insurance on every property that we acquire. So, we, you know, certainly have very clear chain of title. The investor doesn't get deeded the property themself.
Chris Morris: That would be more of, like, a separate account situation. We don't offer that, here at Landfund Partners.
Chris Morris: So if you want the farm deeded to yourself, it would be, you know, go buy the farm, directly. What we do is we allow, you know, hopefully a good solution for investors who do want a exposure to farmland, but don't necessarily have the time, or the market know-how, or the management capabilities to go and buy a farm themselves.
Chris Morris: And help them, you know, get immediately diversified across, almost 50 different properties.
Rachel Stolrow: Thank you.
Rachel Stolrow: Next question, have you considered adding Iowa land to your group?
Chris Morris: We have not. One of the reasons that we focus on our part of the country is most Iowa farmland is trading in the probably, you know, 15,000, 13,000 to $20,000 range, maybe even for your top farmland. I can say right now, we're under acquisition
Chris Morris: For a farm under contract to close a farm for $7,700 per acre, so…
Chris Morris: a pretty significant discount on a dollar basis. Iowa, I believe, not an expert there, but I think there are some rules against investment, ownership by firms from outside the state as well. So,
Chris Morris: think Iowa will probably…
Chris Morris: be somewhere we don't go for a long time, maybe something can change in the future, but we really know how to do what we're doing in our local region. You can't necessarily go to another part of the country and replicate it, but there are, you know, professional investors that do focus just on the Midwest.
Rachel Stolrow: Thank you.
Rachel Stolrow: Do commodities… does commodities pricing impact the value of your land?
Chris Morris: By… not directly, but one of the things that we…
Chris Morris: Think about is the farmland is…
Chris Morris: an asset is ultimately worth the future cash flows that it can generate. So, some investment theory there for you, but, commodity prices do flow through to impact land values at some point.
Chris Morris: There are a number of different conflating factors that make it not so direct, particularly if you do a cash lease. There's also government program payments, there's, crop insurance, there's…
Chris Morris: a number of things that can, you know, farmers dipping into equity on their balance sheet. There's a number of things that can, not immediately correlate to commodity price changes. Over time, it's, you know, really interesting, because a lot of people think.
Chris Morris: That commodity prices are really what moves farmland values, but it's more complicated than that, in that the revenue that a farmer can make
Chris Morris: is both price times quantity. So, if soybean prices stay at $11.50, you know, forever, but if you're able to increase yield on that farm, then the total revenue can go up.
Chris Morris: So that means, just like owning one share of a company that is growing earnings, you owe one acre of land that is growing earnings. There are also some interesting things going on with technology, so as it relates to artificial intelligence, machine learning, GPS tractors.
Chris Morris: as a farm operator becomes more profitable and more productive, that also impacts the value of land. And again, commodity prices could stay exactly the same. So, there's a lot more going on, and happy to unpack that more deeply on a, on a separate call.
Rachel Stolrow: Thank you.
Rachel Stolrow: Next question. You have a lot coming your way, Chris. What are Land Fund Partners' biggest obstacles?
Chris Morris: Yeah, I think one of the biggest obstacles that we face is we are extremely
Chris Morris: diligent on what new farms we will buy. So,
Chris Morris: we see about a hundred… sorry, about a billion dollars of land transact annually, but not all farmland is created equal. So, one of the things that we really think about is only buying the best farmland.
Chris Morris: those deals, you know, don't always pop up, so some years we're happy to deploy less capital than we'd like. But I would say one of the biggest obstacles is
Chris Morris: simply finding more good farmland deals. But we're happy to be patient, and as long as we can continue to generate good returns for our investors, that's really what we're focused on over the long term. So I would say that's probably the biggest obstacle.
Chris Morris: As I was mentioning, we currently are starting to build a bit of an entrance queue to get into the fund. So, you know, always happy to talk to new potential investors.
Chris Morris: And then match that with, really high-quality deal flow.
Rachel Stolrow: Awesome, thank you.
Rachel Stolrow: Can I transfer from a regular IRA to this? Hopefully I'm understanding the question, but can you move from a typical retirement plan that may be invested in stocks, bonds, mutual funds.
Rachel Stolrow: over to a custodian like the Entrust Group to invest in farmland? Yes, you absolutely can, if I am not understanding your question.
Rachel Stolrow: Please feel free to, drop it in the chat again, or reach out to one of us, and we'll be happy to assist.
Rachel Stolrow: Okay, we'll answer a couple more other ones. We'll, again, please go to ir at landfundpartners.com to get those questions answered. What kind of expenses does the fund incur?
Chris Morris: Yeah, so the fund has, management fees, so there's a management fee related to running the fund and managing the properties. There are… we own the land, so we pay the property taxes.
Chris Morris: There's insurance on the farmland and the farmland assets, such as irrigation systems, grain bins,
Chris Morris: I mentioned property tax, insurance, repairs and maintenance. So, we,
Chris Morris: reinvest in repair and maintenance on drainage ditches and other things that happen on the farms. There are some capital expenses, capex improvements that we'll make from time to time on the properties.
Chris Morris: Some other fund expenses would be paying for auditors and paying for tax. Our auditor is Deloitte, the largest audit firm in the world.
Chris Morris: And also, our taxes are done by RSM, which is a large,
Chris Morris: Large regional tax firm. Valuation services.
Chris Morris: We pay for those. So, yeah, I mean, you know, probably some of the typical real estate, expenses that you might… might expect, and we do have, audited financials that break those down as well, if you need to see those.
Rachel Stolrow: Thank you.
Rachel Stolrow: Are you pursuing and employing AG Tech to increase productivity?
Chris Morris: So, we do not, directly operate the farms. There are certainly a lot of, ag tech investments out there. Some of our farmers have started to, play around with drones.
Chris Morris: And the new, you know, the new…
Chris Morris: Combines and cotton pickers and other machinery can run upwards of a million dollars. So, we don't directly take an operational role, we don't directly require
Chris Morris: Our farmers to use any particular ag technology, but the best farmers over time seem to be experimenting with those things and using them when appropriate.
Rachel Stolrow: Perfect.
Rachel Stolrow: Okay, next question here. Describe the various funds offered. I'm not sure if that is a…
Rachel Stolrow: Chris question, or an interest question, I'll kind of go first, so here at the interest group, you can invest in almost anything you'd like, any type of fund within a retirement plan, and Chris, if you wanted to touch on different funds that may be offered as well.
Chris Morris: Yeah, absolutely. So, we have a prospectus that we can send on our Evergreen Fund.
Chris Morris: It's called LFP Soil Enrichment Fund.
Chris Morris: LP,
Chris Morris: And I believe our returns from that vehicle are also posted on our website, if you want to go and check that out. So that's the only current available fund that we have for,
Chris Morris: self-directed IRA investors is LFP Soil Enrichment Fund, which is an evergreen farmland fund.
Rachel Stolrow: Awesome. Thank you.
Rachel Stolrow: Can a farmland ever be converted to a residential plot and profit distributed?
Chris Morris: We have sold some lots… some farmland for residential lots, actually. As you can imagine, those are usually a few acres here or there, and we own close to 46,000 acres, so it doesn't move the needle a lot, but, most of the communities, I'll say, too, that we're, you know, due to the technological
Chris Morris: impacts, we tend to see population actually declining in most of these centers that we own land. You can own… try to buy land
Chris Morris: around an expanding city, so call it Chicago or Nashville, where we're based. There are certainly people that do that, but it's not a primary focus of what we do at Landfund.
Rachel Stolrow: Thank you.
Rachel Stolrow: Is there any depreciation or write-offs? Maybe it's useful for non-retirement plans.
Chris Morris: Yes, there is. We do have, you know, the vast majority of our capital currently invested with us are taxable dollars, not IRAs. We do, you know, work with several retirement account investors, but the majority is taxable. There is depreciation, so since we own
Chris Morris: the irrigation systems, the grain bins, those assets can be depreciated. There's also a new,
Chris Morris: Not new, but an existing rule called…
Chris Morris: IRC Section 180, so Internal Revenue Code Section 180, that allows you to depreciate soil nutrients that many people are utilizing. So definitely some tax benefits for those with, taxable dollars that are looking to invest.
Rachel Stolrow: Thank you. What is the hedge for farmers unable to pay rent?
Chris Morris: We typically do short-term leases, so there's different schools of thought around this. We at Landfund like to do shorter-term leases, so 1-2 year cash rents. We typically get 50% of the rent due in…
Chris Morris: March or April, and then 50% due in November at harvest.
Chris Morris: We require all of our farmers to have multi-apparel crop insurance, so if there's a hailstorm or some other natural disaster that doesn't allow the crop to reach its full yield potential, and the farmer's having a difficult time paying rent, they can receive crop insurance, so we require that.
Chris Morris: I would also say that, it's, you know, pretty rare that a farmer runs into issues,
Chris Morris: part of what we do is also vet the farmers on the front end to understand their financial situation. But yes, we require all of our farmers to have crop insurance, and we're also… we can make UCC filings against the crop, so those would be things that,
Chris Morris: perfect the landlord's security interest in the crop. So if someone does fall into some sort of legal proceeding.
Chris Morris: Our interest as a landlord to receive that rent is highly,
Chris Morris: Securitized or senior in the stack of… Liabilities for that farmer.
Rachel Stolrow: Thank you.
Rachel Stolrow: Next question for you. Have you been negatively impacted by tariffs? If so, how?
Chris Morris: I would say that… We have seen tariffs make life harder for farmers.
Chris Morris: It's been confusing. I think that may be the biggest… Issue for the farmers.
Chris Morris: you know, it's hard to know exactly what is happening there. I know the Supreme Court
Chris Morris: recently ruled against the tariffs that were put in place by the current administration. I know there are supposed other ways to put those in place. You know, and does that survive past
Chris Morris: this current administration, or even past November.
Chris Morris: It's hard to tell, but…
Chris Morris: It certainly has made life more difficult for farmers. I'd say last year was a difficult… a harder year, particularly for small farmers that were impacted by some of those things.
Chris Morris: There have been some offsetting government program support payments to try to make them whole, but,
Chris Morris: generally, I would say that, tariffs would be… Not particularly beneficial to farmers.
Rachel Stolrow: Yep.
Rachel Stolrow: Next one. What is the price per acre?
Chris Morris: So, farmland, you know, varies widely in terms of what you can buy it for per acre, as I mentioned.
Chris Morris: one of the farms we're currently purchasing is $7,700 an acre, which is significantly lower than parts of the Midwest, so it varies a bit. I would say, you know, giving a range, I would say we see farmland trading in our region from
Chris Morris: Anywhere from, you know, your lowest quality farmland can even go for $4,000 an acre, where your most high-quality farmland, we've seen that actually trade
Chris Morris: close to $9,000 an acre. We've seen comps
Chris Morris: North of $9,000 per acre in our region.
Rachel Stolrow: Awesome.
Rachel Stolrow: Alrighty, next question for you. If there are any loans, do you pay them off or continue to service the loan?
Chris Morris: So…
Chris Morris: if we… I'm taking that question as if we buy a property and there are loans on the property. So, it depends. Sometimes we're able to actually acquire the farm
Chris Morris: and also assume the mortgage. So, which is actually beneficial for the seller, because they don't have to have a prepayment penalty when they pay off the existing mortgage.
Chris Morris: We'll do that particularly if the rents… I'm sorry, if the interest rate is locked in at a low rate for a long time. Over the last few years, we've seen interest rates increase, which I think everyone's aware of.
Chris Morris: But if you have a loan that was issued in 2020 or 2021, it might be at a very attractive, fixed, low rate. So in those situations, we can actually go in and assume, the existing debt on the property, depending on the bank or the lender.
Rachel Stolrow: Thank you.
Rachel Stolrow: Next question, can we specify a state and or location of investment or foreign investment?
Chris Morris: Yes, so we… all the land that is owned by a Soil Enrichment Fund.
Rachel Stolrow: is located in Arkansas, Mississippi.
Chris Morris: and Louisiana. So those 3 states currently, we do look at land in parts of Tennessee, parts of Missouri, and parts of Kentucky as well.
Rachel Stolrow: them. Thank you.
Rachel Stolrow: Next question, and again, Chris, feel free to go, you know, in-depth in this on a one-on-one, but how long are your hold periods, and how do you plan your exit?
Chris Morris: Yeah, so typically, we are building bigger farms.
Chris Morris: We see these farms continuing to appreciate in value, so we're not necessarily looking to sell any of them today, until we see, you know, further appreciation, and… or we see the water rights situation play out that I talked about a little bit earlier.
Chris Morris: We think that owning high-quality, large farmland tracts
Chris Morris: The demand for those is, only going up in our view, and we see if we can own these for, you know, longer, then we think that that will benefit all the investors in the fund. We will sell, as I was mentioning, we'll sell for, you know, 2 or 3X,
Chris Morris: current valuation or current purchase price, because we think that the intrinsic value of these farms should actually be much higher than what we're currently buying them for. So from a value investor mindset, we want to continue to own those assets and let them play out, but if someone's willing to pay, you know, a very high price, such as for a solar farm or a data center, we'll absolutely look at those situations as fiduciaries for
Chris Morris: our investors.
Rachel Stolrow: Thank you.
Rachel Stolrow: Next question. What mistakes has your company made over the last 10 plus years? I believe, like you said, it was around 20, and… oops, sorry, the question kind of fell down here.
Chris Morris: Yeah, yeah, no, that's great.
Rachel Stolrow: And, yeah, what have you… and what have you learned from them? Has this shifted, or how have you shifted your fund?
Chris Morris: Yeah, that's a great question. You know, certainly one of the biggest mistakes we made, which we, you know, have learned from, is our very first deal that we bought, we probably paid 5% over market value for that farm.
Chris Morris: You know, being a first investment, you don't know… you don't know what you don't know, I think is what people say. So, we, paid a little bit too much money for that farm, and it took a while for that
Chris Morris: to recover, right, and get back to the returns that we would have liked it to be. So, that's made us extremely disciplined on the buy. That's why we really stick to our price going in.
Chris Morris: And have learned how to, really understand and stick to our… stick to our numbers in a negotiation, so that's a very important part of the process. Another mistake that we have made, or something that we've learned from, is we, in the 20…
Chris Morris: you know, 19 to 2021 timeframe, we started to see a lot more competition for big farms, so we would go after large-scale farms, spend a lot of time underwriting them, send our farm managers to look at them, do a lot of due diligence, and then we would make an offer for the property, call it 3,000 or 4,000 acres.
Chris Morris: And we would be 30 or 40% lower than what someone else was willing to pay.
Chris Morris: And we really had to scratch our heads and say, you know, what is going on here?
Chris Morris: But there are just some mega, mega funds and billionaires out there buying up those bigger tracts of farmland. So, you know, we learned not to waste our time on those. We focus, and that allowed us to pivot and really informed a lot of our current strategy on buying the smaller farms, adding value to them, buying from local owners, and not chasing these really big deals that
Chris Morris: Obviously, someone with a much lower cost of capital, or a much longer investment horizon, or a different reason to own it, they were buying it for a lot more money than we would pay. So, great market comp transactions, but we really retooled and went lower down in the market to focus on smaller deal sizes. So, that was something that we learned,
Chris Morris: We've also learned how to make irrigation improvements on the farms. We've developed that skill set over the course of
Chris Morris: the last 12, 13 years, you know, how do we increase rents? Looking at every single farm and understanding, you know, a very clear path to creating value on that acquisition is something that we've gotten a lot better at over the years.
Rachel Stolrow: Awesome, thank you.
Rachel Stolrow: Next question, and we're getting down to the final few here. So, is the investment we make into a land bank as part of a farm or a fund, in addition.
Rachel Stolrow: When do we start seeing returns? So I know some of these are a little bit of components of questions that we have touched on as well.
Chris Morris: Yeah, so we're a fund. Investors who invest in the fund have a… are a limited partner. They're… they have a capital account in the fund.
Chris Morris: Once the money is called into the fund, they're immediately participating. So, if someone signs up, we don't charge any fees on committed capital. We only start charging an investment fee once your money is invested in the fund. So…
Chris Morris: immediate participation as soon as you get into the fund, and no fees before, that time. I think that answers the question. I think we covered some of the other of it on a previous answer.
Rachel Stolrow: Will… Will the tax info be reported via a K1 or something else? If so, when?
Chris Morris: Yes, K1, so limited partners receive a K1. We typically get those distributed in April, and, you know, try to get those out to investors as soon as possible.
Rachel Stolrow: And then, okay, let's see, I think we have about one more left here. So, do you invest in individual farms, or only farmland funds, such as land fund? So, I think, actually, we may have answered that one already.
Rachel Stolrow: All right, we have gone through over 60 questions, Chris, so quite a few questions. Thank you so much for
Rachel Stolrow: hopping on here today, and thank you everyone for your participation. It has definitely been one of the, most amount of questions that we have received, so you all have been great.
Chris Morris: Great. Well, thank you so much, Rachel, and the Entrust team. Thank you all for sticking around, and in the event we didn't get to your question, or you have a follow-on, feel free to reach out. We'd love to talk to you. Thanks.
Rachel Stolrow: Alright, thanks everybody, bye.